Diabetes mellitus is the leading cause of end-stage renal disease and also increases the risk of atherosclerotic vascular disease. Hypertension amplifies both problems. Detection of microalbuminuria, a common and early manifestation of diabetic nephropathy and a marker for cardiovascular risk, permits early treatment to reduce progression of nephropathy and vascular disease in diabetes. Although optimal glycemic control is essential to reduce the risk of nephropathy, aggressive blood pressure lowering to a level of 130/80 mg Hg or below in hypertensive diabetic patients is as important as glycemic control. Initial drug therapy for nephropathy should include an angiotensin-converting enzyme inhibitor (or if contra-indicated, an angiotensin receptor blocker), as several large randomized double-blinded multicenter clinical trials have demonstrated an independent renoprotective effect with renin angiotensin system inhibition. The role of advanced glycation end products in the pathogenesis of renal and vascular disease in diabetes is becoming more clearly established. However, the use of therapeutic strategies directed at blocking their effect still awaits further investigation. A multifaceted intervention program that combines optimal glycemic control, lifestyle modification/cardiovascular prevention guidelines such as lipid control and smoking cessation, with appropriate antihypertensive therapy when indicated, will prevent or delay both the occurrence and progression of diabetic nephropathy.